The ability to purchase items online was fairly new. Well, it goes without saying. In less than a minute, you can open an app or web browser and have something delivered the next day. Alternatively, you can book your order and receive it the same day. The phenomenon of electronic commerce (e-commerce) is attractive to both consumers and businesses and, as the statistics show, is expanding dramatically. According to the United States, e-commerce sales accounted for 9.7% of total sales in 2018, according to the Census Bureau. That's more than six times his e-commerce sales, which were only 1.6% of his 2003 total sales, 15 years ago.
E-commerce does not appear to be slowing down. In 2017, Forrester, a market research firm, predicted that by 2022, e-commerce will account for 17% of U.S. retail sales. In the same report, annual growth in online sales is forecasted to be 13%. Another forecast by the National Retail Federation puts online retail growth at 10-12% annually.
These numbers are impressive and help give you an overview of e-commerce, but there's a lot more to know. This guide will help you learn more about the benefits of an online storefront, how to market to prospects online, and expand your overall business knowledge. The following sections cover topics such as the benefits of e-commerce, specific trends in e-commerce, and the future of e-commerce.
Follow the instructions to develop a basic understanding of e-commerce.
What is e-commerce?
Don't be shy if you're not 100% sure what e-commerce is. It's a fairly simple concept, but you can easily find some definitions with some differences. More on that later.
The simplest way to define e-commerce is electronic transactions that take place online. When it comes to buying and selling products and services online, it's e-commerce. Therefore, all the following examples are considered e-commerce:
Buy and download digital music files online.
Buy physical books online and have them delivered to your home.
Reserve items on the Home Center website and pick them up directly.
Each of these scenarios uses an online platform as part of the transaction lifecycle. In the case of digital music purchases, it can be done entirely online, or you can use the Internet to find what you need in your local store. Please be careful. As discussed in the section on types of e-commerce, online transactions can also play a role in other areas, such as when businesses sell products and services to other businesses.
If you're wondering how e-commerce is defined differently in some sources, it usually has to do with the number of transactions that need to happen online. Some say that if the terms of sale do not occur online (e.g. if you see the product online and buy it directly there) or if the payment is not made online, it is not e-commerce.
Don't worry about these subtleties, but if you're interested in a comprehensive definition, here's how the U.S. Census Bureau approached the term:
E-Commerce Sales means that a Buyer communicates via the Internet, mobile devices (m-Commerce), extranets, Electronic Data Interchange (EDI) networks, or electronically negotiated mail or other equivalent online systems. Payment can be made online or online.
Development of e-commerce
E-commerce may be a big part of today's retail market, but it is a relatively recent development. Until companies like Amazon and eBay used online technology to reach customers, the traditional business was dominant. Today, click-and-mortar companies regularly combine physical stores with online platforms to sell their products and services.
How did today's generation of internet-savvy companies get to where they are today? Here are some of the top e-commerce events and trends.
Predecessor of e-commerce
Several technological advances have given rise to modern e-commerce.
They can be traced back to the 1960s when electronic trading was formed on primitive computer networks. Instead of computers processing paper orders and invoices, information can be sent electronically through a concept known as Electronic Data Interchange (EDI). Meanwhile, the military created the ARPANET to allow it to transmit vital information in the event of a nuclear attack. It's hard to imagine, but EDI and ARPANET served as the foundation for electronic commerce as we know it.
The next series of events took place in the 1980s. In the early 20s, you could send e-mails and exchange documents on your university research computer. In 1984, CompuServe added a service that allowed home computer users to browse an electronic mall with products from over 100 of her online retailers. Product demonstrations and full-color photographs were also provided to consumers, which was innovative for its time. He is one of the early examples of online commerce, although e-mail was not a huge success. Until 1991, commercial companies were prohibited from trading on the Internet. At that time, e-commerce became possible when the National Science Foundation lifted the ban. The only thing that had to be dealt with was security, which was resolved in 1994. Secure Socket Layer (SSL) has been integrated into the Netscape 1.0 Internet browser, enabling secure online financial transactions.
It didn't take long for them to get started. On August 11, 1994, a consumer purchased a Sting album online. A consumer reportedly used a secret code to send his credit card number to a team of young cyberspace entrepreneurs developing a secure online marketplace. The deal made headlines and paved the way for modern e-commerce.
Amazon and eBay Start Talks
Amazon and eBay have arguably contributed more to the development of e-commerce than any other company. Launched in the mid-1990s, both companies have amassed tens of millions of users in just 10 years. Amazon starts selling books to buyers. With virtually no competition, Amazon founder and CEO Jeff Bezos has been able to expand from books to music to clothing and now just about any product category you can think of. In 2005, ten years after Amazon sold its first book, the company made $359 million in sales, according to the International Business Times. In the first quarter of 2019 alone, Amazon reported $59.7 billion in sales.
eBay was launched the same year Bezos founded his Amazon. eBay began as Auction Web, offering users the opportunity to bid on other people's used items. Auction platforms appealed to a wide range of consumers, who could find offers for a wide variety of products. By 2007, he had over 220 million eBay users and generated $52.5 billion in revenue.
The modern e-commerce landscape
There is a clear overlap between what Amazon and eBay have done and what e-commerce is today. Thanks to two e-commerce giants, online transactions are now integral to how companies do business.
This is very basic and unusual for a retailer today to have his 100% brick-and-mortar store. Consumers today expect companies to offer their products online in some way. From online catalogs to the ability for large retailers to reserve products online and pick them up in-store, the click-and-mote approach to business is now the norm. This trend is related to how businesses serve their customers both online and offline. This way people can enjoy the convenience of both options. Consumers can shop late in the comfort of their own homes or visit stores to see a range of product options in person.
There's a lot more to what the modern e-commerce landscape looks like, and the rest of the guide will explore that further. Take a look at the following section to learn what the evolution of e-commerce has brought. The following topics on types of e-commerce show how online transactions have become pervasive in all kinds of business models.
Types of e-commerce
Amazon and eBay's innovative e-commerce business models have impacted more than online commerce. This has led companies across the business model spectrum to recognize how e-commerce can improve their business.
As a result, several types of e-commerce exist today. Here is a brief description of each. Business-to-consumer (B2C) e-commerce
B2C e-commerce is probably what comes to mind when you first hear the term e-commerce. It refers to a product or service that a business sells to individuals.
Many common examples show B2C e-commerce. For example, if you go to his website on Amazon or Walmart to buy something, that's B2C e-commerce execution. The same goes for most things you buy online. Suitable for this type of e-commerce when businesses sell. It all started with B2C e-commerce. From electronic malls to his first official online purchases in the form of Sting albums, these early examples are rooted in his B2C e-commerce.
Business-to-business (B2B) e-commerce
Not all companies market to individual consumers. Some companies sell their products and services to other companies. When it happens online, it becomes B2B e-commerce.
An example of B2B e-commerce is web development. Ironically, there are also concepts like e-commerce, where virtually every business needs a website. If a company wants to have a virtual storefront, it needs to create a website. This company may be looking for a web development company with experience in e-commerce. If you find a company that will hire you online, that's B2B e-commerce for real. A web development company provided a product to another company.
The same basic idea can be found in other fields. A typical local business can purchase office equipment online from retailers such as Xerox. If that local business needs a vehicle for its core function, parts such as tires can be ordered online from companies like Goodyear. In these examples, Xerox and Goodyear participate in their B2B e-commerce. Of course, these two companies are also active in their B2C e-commerce.
Consumer to business (C2B) e-commerce
Sometimes traditional roles are reversed. While you may be accustomed to businesses selling products and services online to consumers (B2C e-commerce), individual customers may be able to sell products and services to businesses. Paid reviews are an example. If a consumer owns their blog, that person can contact the relevant business for the opportunity to post their products and services on their blog. The company pays the person for blog posts, videos, or podcasts to take advantage of marketing opportunities. This is C2B e-commerce because it's all done online.
Another good example of C2B e-commerce reflects the general trend of individuals earning or supplementing their livelihoods. Platforms have emerged that allow freelancers to market their skills to clients. Freelance photographers, writers, developers, and more use these sites to protect their businesses from corporations. It is C2B e-commerce because individuals sell products and services to businesses online.
Consumer-to-consumer (C2C) e-commerce
When a consumer can sell products and services online to businesses with her C2B e-commerce, it's just a small step for consumers to sell to other consumers.
A simple way to describe C2C e-commerce is the freelance platform in the previous type of e-commerce. Instead of freelancers selling products and services to businesses, C2C e-commerce freelancers collaborate with other consumers. Think of a consumer looking to create a professionally designed graduation announcement or family website. Neither party is an established company.
Other examples are even simpler. Imagine a couple who wants to take a photo of someone they've found online who is passionate about photography. This type of relationship and transaction constitutes his C2C e-commerce, as the vendor does not have a real photography business. One common scenario for him is selling items to others online on sites such as eBay and Craigslist. Transactions are conducted online and neither party is an established company. In other words, C2C e-commerce is running. Government e-commerce
It is also possible for businesses and consumers to participate in e-commerce.
One example is consumer-to-government (C2G) e-commerce. In this case, individuals pay taxes and tuition online to the government. Another type of government e-commerce is when companies provide services to government agencies. A strategic information technology company, Synergetic has a client list that includes the National Institutes of Health, the Veterans Administration, the Department of Defense, and the Department of Agriculture. This business model is called business-to-government (B2G) e-commerce. Other opportunities may become possible in the future. According to Federal Computer Week, “The Defense Authorization Act of 2018 mandated the creation of an Amazon.com- like a portal for federal buyers, which prompted the General Services Administration to create such a platform. It was placed on a tight schedule to develop and test.'' GSA plans to pilot the system first with a limited number of government participants in late 2019.
Why e-commerce?
Compared to traditional retail, e-commerce offers advantages that take your business to the next level. Many people naively assume that companies should build e-commerce capabilities into their business plans, but it's important to understand why this is often the case.
The most obvious benefits of e-commerce may seem so basic that they don't need to be addressed. So consumers can shop online. The opportunity to buy products and services online rather than in person is, frankly, tremendous. Suddenly, geography didn't matter so much. An e-commerce website means your business doesn't have to be in a prime location or have a brick-and-mortar storefront.
Customers who shop online instead of in-person lead to additional benefits for businesses. E-commerce focuses on online marketing rather than targeting local audiences with traditional advertising methods. Concepts like search engine optimization (SEO), pay-per-click advertising, and social media help level the playing field a bit. Online marketing typically costs less than the traditional marketing techniques required to succeed in traditional retail. Also, compared to the cost of running an automated website, running an e-commerce store is cheaper when you factor in labor costs. No real estate costs with E-commerce are another bonus. e-commerce trends
What are some notable concepts impacting the world of e-commerce? You can find dozens of examples, but here are a few trends that show what businesses can do with their online storefronts increase.
Influencer marketing
Influencer marketing is a social media marketing strategy that uses influential people to draw attention to your product or brand.
Think of this as a new twist on having a spokesperson. However, influencer marketing is often fairly short-term. Influencer marketing is approaching individuals online by companies looking to capitalize on the significant number of social media followers of influencers. If the next one is closely related to the company's niche, it's a good partnership. Influencers get paid to market their products and services. An example is a fashion influencer being paid by an aspiring designer to showcase a new line of accessories.
These types of relationships can exist in almost any type of business. On platforms like Instagram, Twitter, and even YouTube, influencer marketing allows businesses to quickly reach the specific audiences they target.
One-click purchase
One-click buying is exactly what it sounds like. Ecommerce stores can simplify the shopping process by allowing users to complete the entire purchase without going through multiple checkout steps.
One-click buying is a win-win. Customers save time by not having to select saved or default options such as shipping speed or the payment method. One-click purchases increase impulse purchases, allowing businesses to increase profits. Additionally, this concept caters to his mobile users who need to make purchases when they don't have time to go through unnecessary checkout procedures. Consumers are more likely to shop on your site if the system is as easy to complete as possible.
Social shopping
Social shopping is another e-commerce trend built on the idea that making it easier for consumers to shop leads to higher profits. Social shopping provides people viewing products on social media with a direct link to make a purchase.
This feature has been integrated into Instagram and Pinterest. When people are looking for children's art projects or ideas on how to decorate their homes, they may come across a great activity or a set of matching cushions and blankets. Find out, but even if you don't want to buy anything, you might be tricked into buying a useful product. Providing a direct link makes it as easy as possible for companies to purchase your products. Adding direct links, like one-click purchases, is a powerful way to increase sales.
Subscription service
Subscription services appeal to customers by offering products that people need on a regular basis. Customers can receive new orders every month by simply signing up for a subscription box.
The future of e-commerce
There is no doubt that e-commerce will continue to thrive and redefine the way business is done. E-commerce is seen as an option for brick-and-mortar retailers, but now the click-and-mortal model is alive and well. Perhaps trading physical space is the current option.
Look to the future and expect technology to help you respond faster to your customers. One of the biggest trends in e-commerce is personalization, and brands continue to make strides in this area. With the integration of artificial intelligence, e-commerce platforms can predict what customers are looking for based on past purchases and other metrics, such as browser cookies, that show how consumers navigate sites. I can. Artificial intelligence tools can also automate customer service, send automated engagement emails for marketing, and collect data that can improve your e-commerce platform as a whole.
This is just the beginning of the future of e-commerce, and businesses of all sizes need to be ready. Earn an online business degree or an online marketing degree to learn the skills that will help lead companies to navigate e-commerce. Completely online, you'll gain the knowledge and skills you need to succeed in the world of business. Both Concordia and St. Paul programs offer small class sizes and a personalized learning environment designed for student success. Learn from knowledgeable instructors with industry experience. Get started with CSP today.
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